On a recent trip to Washington, I went to the Newseum, one of those American museums dedicated entirely to the history of one thing, in this case news reporting. In the foyer is an entire segment of the Berlin Wall, the largest outside Germany. Walking around that concrete slab, I marvelled at the scale of the thing, its gunshot pockmarks and the arabesque graffiti: real history, written in a kind of cryptic braille.

And then I looked at the plaque alongside, which tries to explain the wall's meaning in the language of journalism. The graffiti on the Berlin Wall, it says, was sprayed on by "freedom-lovers" – a phrase so ideologically overcharged it sounds absurd. The more times I read it, the more meaningless it seemed: what if the sprayers just simply loved graffiti?

Reading Stefan Kornelius's biography of the German chancellor, I was reminded several times of the display in the Newseum. Angela Merkel may currently be the most discussed and least understood ruler in the world. Likely to be re-elected on 22 September for the third term in a row, she is as despised as she is admired. Some think she is a neoliberal zealot, others reckon she is a closet Marxist; she's both an austerity addict and the first conservative social democrat, a scientifically minded rationalist and a religious ideologue. The true nature of the Merkel phenomenon is as elusive as North Sea fog. For some reason, this makes it irresistible for journalists to wheel out the equivalent of the "freedom-lover" tag.

Kornelius, for one, can't resist. In an attempt to explain what makes Merkel tick, he points to her speech at the Christian Democrats' party conference in October 2003. This is considered the moment she came closest to baring her ideological soul, but it's quite hard to tell what she was going on about: "Without freedom there is nothing! Freedom is the joy of achievement, the flourishing of the individual, the celebration of difference, the rejection of mediocrity, personal responsibility."

Another speech, from 2010: "On one side stands freedom from something; on the other, freedom to do something. So when we speak of freedom we are always speaking of someone else's freedom." Freedom lies in the release of the individual from the collective, but also the solidarity individuals feel towards the collective.

What is the cultural glue that holds Europe together, she was asked in 2007, three years before the first Greek bailout: "Freedom in all its form[s]: freedom to express opinions, freedom to believe or not believe, freedom to trade and do business, the artist's freedom to shape his work according to his own ideas." Freedom means everything to Merkel, but possibly also nothing; it's impossible to tell.

Luckily, Angela Merkel isn't really an attempt to explain Merkel's true political convictions, but a biography about foreign policy and Merkel's political decision-making process – and in that respect Kornelius, whose career as a journalist has tailgated hers since they first met in 1989, proves an illuminating guide.

Born in 1954 to a Protestant pastor and an English teacher, Angela Merkel nee Kasner moved from Hamburg in the west to the village of Quitzow in the east when she was just a few years old: it bears repeating that by the time the Berlin Wall went down she was 35 years old. "The Merkel mystery," Kornelius writes, "is rooted in the failed east German republic."

She is revealed in this book as more culturally eastern European than we tend to think. Her Stasi file noted that while she viewed the Soviet Union as a dictatorship, she was also "enthusiastic about the Russian language and culture". In her early teens, she was selected as third-best Russian student in the GDR. My favourite of Kornelius's anecdotes is that she learned English not by secretly reading Orwell under the covers, but with the help of the British communist newspaper, the Morning Star.

References to Merkel's past are often used to smear her character, and for that reason, more respectable profiles focus on her training as a physicist or her religious household when explaining her political style. But Kornelius draws conclusions from her upbringing that go beyond the cliches. East Germany's progressive attitude to women at work, he suggests, may explain her distaste for "the tendency that certain male politicians have constantly to assert themselves", as she once put it. Her most influential and longest-serving adviser is a woman, and Kornelius claims she would have preferred a President Hillary Clinton to Obama, with whom she has a rather frosty relationship.

She showed little scruple abandoning her father figure Helmut Kohl, who had recognised her talent when she was still the press officer of the GDR's Democratic Awakening party and given her a first ministerial post in 1990. On 22 December 1999, in a newspaper comment piece, she called for her party to let go of the man who had led it for 25 years – a nice Christmas present.

Those 35 years to the east of the iron curtain may also hold a clue to her reluctance to take a lead during the eurozone crisis: the philosopher Jürgen Habermas has criticised her for "dozing on a volcano". Merkel's critics have said she does not feel passionately about European unity in the way her predecessors did, that it takes third place to her cultural yearning for Russia and her ideological admiration for America. But Kornelius argues convincingly that she has a clear sense of the value of European culture – it's just she believes sentimentality won't guarantee its survival. "I know what living in a collapsing system feels like," she has said, "and I don't want to go through that again."

This aversion to misty-eyed idealism, her refusal to score cheap goals, commands admiration; nothing demonstrates it better than when she was asked by a Der Spiegel journalist whether she was proud to be German. "I don't think the Germans are particularly bad or outstandingly wonderful. I am fond of kebabs and pizza, I think the Italians have a nicer alfresco cafe culture, and I think there is more sunshine in Switzerland." But of course likable people can make terrible decisions: in Merkel's case, a strategy of aping social democracy at home while demanding austerity of the EU may be at the centre of Europe's current social imbalance. Kornelius mentions this theory, but seems reluctant to explore it further. The problem with this "authorised biography" is the problem of any book by an active correspondent: too much frank talking is risky. Thus the praise drowns out the criticism.

So we have to make do with reading between the lines. At the start of her chancellorship, Kornelius writes, Merkel was keen to seek advice from external experts. More recently, however, she has allowed her circle of confidants to close around her. As a result, "she now rules largely unchallenged, particularly in foreign policy". It's all too reminiscent of a recent British prime minister, whose control of his backbenchers she so admired that on taking office in 2005 she dispatched her own head of staff for two-weeks' work experience in Downing Street. Just under a decade later, Tony Blair could perhaps teach Merkel another lesson: one disastrous foreign-policy decision can undo almost everything.